Royal Mail sell-off: Thatcherism lives on

Before postal workers even have a chance to strike over the plan.

 

Thatcherism lives on well into the new millennium it seems with the news that the government will rush the sale of Royal Mail before postal workers have a chance to strike over the plan.

Nothing could be more polarising this week following the now seemingly heroic Labour bravely, although perhaps unwisely throwing down the gauntlet to the energy companies while the Con-Dems attempt to royally screw the nation out of its postal service.

The Communication Workers Union (CWU) is balloting 100,000 of its members on a nationwide strike over the privatisation, as well as on changes to salary and pensions.

Voting in the strike ballot will close on 16 October while Royal Mail should be privatised by 15 October. The earliest a strike could take place is 23 October, making the whole thing seem a little bit pointless.

The depressingly low value of the post office has been placed between £2.6bn and £3.3bn after the government announced it will beginning selling shares between 260p and 330p each.

Bear in mind the businesses profits to the 52 weeks to the end of March jumped to £403m, up from £152m for the previous year on the back of its growing parcel delivery service, while, admittedly, the letter industry dies a long, torturous death trapped under an ever growing pile of junk mail.  

Despite its problems, many may struggle to see the upside of such a sale considering we are now seeing the long term affects of the utilities sell off. So what are the, hypothetical, pros?

Business secretary Vince Cable has said that the Royal Mail needs the capital this IPO will bring in order to modernise. In a kind of confused agreement chief executive at Royal Mail Moya Greene said that the company would "not change" while being better able to compete in a competitive market. That’s a thinker.

Vince and Moya are right in some respects; Royal Mail operates in an increasingly competitive market and, unlike the energy companies and the banks, the services on offer are not seen as one indistinguishable gelatinous blob, all giving the exact same service at the same price but with a different, just as ugly, face.

It’s not just a question of picking a provider and sticking with them until you get so pissed off you switch to a different one where the cycle begins all over again (in a way painfully reminiscent of out system of government). Royal Mail has to compete to be the first choice everyday of private people and businesses when there seems to be more UPS and FedEx trucks on the road than ever.

Perhaps privatisation is the way forward this time. If previous governments hadn’t done such a lamentable job the last few times, allowing big business overseas to take us all to the cleaners, maybe people would be able to see beyond the failures of the past to entertain the idea that this time it might work.

But the fear of stagnation, greedy profiteering, shady board room deals are not going to be far from peoples minds and pulling a fast one on the CWU in the back is unlikely to be seen as a fair but shrewd business tactic.

With the bull rush move of not allowing Royal Mail staff (who will be expected to carry a 10 per cent share of the company in less than a month) to have their say and, if they so choose to, call a strike, it seems the biggest government sell off since the early 90s is off to a bad start.

But hey, something’s got to pay for that sinking ship called HS2, right?

Photograph: Getty Images

Billy Bambrough writes for Retail Banker International at VRL financial news.
 

Photo: Getty
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Why Chris Grayling is Jeremy Corbyn's secret weapon

The housing crisis is Labour's best asset - and Chris Grayling is making it worse. 

It feels like the classic Conservative story: wait until the election is over, then cancel spending in areas that have the temerity to vote Labour. The electrification of rail routes from Cardiff to Swansea – scrapped. So too is the electrification of the Leeds to Manchester route – and of the Midland main line.

But Crossrail 2, which runs from north to south across London and deep into the capital's outer satellites, including that of Transport Secretary Chris Grayling, will go ahead as planned.

It would be grim but effective politics if the Conservatives were pouring money into the seats they won or lost narrowly. There are 25 seats that the Conservatives can take with a swing of 1 per cent from Labour to Tory, and 30 seats that they would lose with a swing of 1 per cent from Tory to Labour.

It wouldn’t be at all surprising if the Conservatives were making spending decisions with an eye on what you might call the frontline 55. But what they’re actually doing is taking money away from north-west marginal constituencies – and lavishing cash on increasingly Labour London. In doing that, they’re actually making their electoral headache worse.

How so? As I’ve written before, the biggest problem for the Conservatives in the long term is simply that not enough people are getting on the housing ladder. That is hurting them in two ways. The first is straightforward: economically-driven voters are not turning blue when they turn 30 because they are not either on or about to mount the first rungs of the housing ladder. More than half of 30-year-olds were mortgage-payers in 1992, when John Major won an unexpected Conservative majority, while under a third were in 2017, when Theresa May unexpectedly lost hers.

But it is also hurting them because culturally-driven voters are getting on the housing ladder, but by moving out of areas where Labour’s socially-concerned core vote congregates in great numbers, and into formerly safe or at least marginal Conservative seats. That effect has reached what might be its final, and for the Conservatives, deadly form in Brighton. All three of the Brighton constituencies – Hove, Brighton Kemptown and Brighton Pavilion – were Conservative-held in 1992. Now none of them are. In Pavilion they are third, and the smallest majority they have to overcome is 9,868, in Kemptown. The same effect helped reduce Amber Rudd’s majority in Hastings, also in East Sussex, to 346.

The bad news for the Conservatives is that the constituencies of Crawley, Reading, Swindon and in the longer-term, Bracknell, all look like Brightons in the making: although only Reading East fell to Labour this time, all saw swings bigger than the national average and all are seeing increasing migration by culturally-driven left-wing voters away from safe Labour seats. All are seeing what you might call “Hackneyfication”: commuters moving from inner city seats but taking their politics with them.

Add to that forced migration from inner London to seats like Iain Duncan Smith’s in Chingford – once a Conservative fortress, now a razor-thin marginal – and even before you add in the appeal of Jeremy Corbyn’s person and platform, the electoral picture for the Conservatives looks bleak.

(It should go without saying that voters are driven by both economics and culture. The binary I’ve used here is simplistic but helpful to understand the growing demographic pressures on the Conservatives.)

There is actually a solution here for the Tories. It’s both to build more housing but also to rebalance the British economy, because the housing crisis in London and the south is driven by the jobs and connectivity crisis in the rest of the United Kingdom.

Or, instead, they could have a number of measures designed to make London’s economy stride still further ahead of the rest, serviced by 5 per cent mortgages and growing numbers of commuter rail services to facilitate a growing volume of consumers from London’s satellite towns, all of which only increase the electoral pressures on their party. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to domestic and global politics.